Gold climbs as U.S. jobs data signals economic growth, inflation

Gold futures rose for the third time in four days after a report showed U.S. hiring picked up the past three months, pointing to an improving economy that may fuel inflation as the Federal Reserve adds more stimulus.

Payrolls rose 157,000 in January, and the previous two months were revised higher, government figures showed today. The jobless rate increased to 7.9% from 7.8% as the government incorporated new Census Bureau population estimates into data calculations. The Fed said this week it will keep purchasing securities at the rate of $85 billion a month after the economy paused in the fourth quarter.

“The payrolls number was very good, and the Fed’s stimulating the economy creates a boost, so the thinking is that this is inflationary,” Carlos Perez-Santalla, a broker at PVM Futures Inc. in Hoboken, New Jersey, said in a telephone interview. “The assumption is that with more money being dumped into the system, we’ll see quicker debasement of the currency.”

Gold futures for April delivery climbed 1.1% to $1,679.80 an ounce at 9:40 a.m. on the Comex in New York. In January, the metal fell 0.8%, the fourth straight decline and the longest slump since May, as signs of a rebounding U.S. economy curbed demand for the metal as a haven.

The labor revisions added a total of 127,000 jobs to the employment count in November and December.

“Employment has continued to expand at a moderate pace but the unemployment rate remains elevated,” the Federal Open Market Committee said on Jan. 30. The central bank kept borrowing costs at a record low.

“The unemployment rate ticked up a bit, and the Fed has said they’ll hold rates low until that comes down,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview. “The Fed will keep going on its mandate, and that’s helping gold.”

Silver futures for March delivery gained 2.3% to $32.065 an ounce on the Comex.